Starting a tenancy

How to do a Condition Report that is Argument Proof

I always dreaded tenants moving out. I had to conduct the final inspection to determine what needed to be fixed, cleaned or taken out of the bond. The worst part was the disagreements with the tenants. It didn’t take me long to realise a good condition report meant less disagreements and a well left property.A property condition report is simply a document which shows the condition of the property when the tenant moves in. This is essentially the only evidence you can use to prove what the place was like at at the start of the tenancy. An elephants memory will not help you here.The better this report, the better the tenants will leave your property in at end of the tenancy.Unfortunately so many landlords leave them until the last minute. They miss things or even worse, they don’t do them at all because they get distracted with other issues when the tenants are moving in like the bond, lease and keys.I get it. These condition reports can be difficult and timely to put together but the last thing you want is angry tenants who take you to court for trying to claim their bond without any evidence.That’s why I’m going to take you through the steps of how to easily create an iron-clad property condition report…

Written Template

Legally, condition reports need to be written and include the minimum content defined by the law in each state. You can use videos and photos as well (we’ll get to that in a second) but you can’t just use them on their own without something written down and signed.The written reports will have a list of items like flooring, walls and ceiling etc etc separated by room with categories next to each one like “clean” or “undamaged” with a “yes” or a “no” put alongside it and room for comments too.Here’s what one looks like. As you can see, they go into quite a bit of detail and they can take some time to put together.

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I prefer to type up the report on a spreadsheet as it allows me to use the same report (with minor adjustments) from one tenancy to another. It’s just important to have the required minimum information as per the Residential Tenancy Act on the report.When you're filling them out keeping things simple is best. Just a “yes” in each column then only some comments where necessary. The more comments you make on the report the more you leave yourself open for argument.If you have to put a ‘no’ in any column that’s when it’s important to make a detailed comment as to what specifically is damaged, dirty or not working. For example if you say the range hood is damaged (‘no’ in the undamaged column), it just might be a button that’s missing - so comment on it. Fan speed button is missing but still able to adjust speed.(By the way – you should make sure the property is sparkling clean before you do the report and fix up some things that need attention. If you can’t fix it before the report make a note of what will be fixed and the date - be specific. That way the tenants will need to leave the property in the same condition when they move out (given fair wear and tear). So for example if the range hood was ‘clean’ when the tenant moved in, the filters on the range hood should not be greasy when they move out.Here are state specific property condition report templates you can use:VICNSWQLDWATASSANTACTAllow about 2 hours to do the report the first time around. With a few adjustments you can use this same condition report for the next tenants.

Inventory List

A lot of property owners and managers like to keep an inventory of items that are to stay at the property in the comment section of the basic template. This doesn't work for me for two reasons; first of all when I am doing the condition of the house I am concentrating on the condition, not what is in the room. Also, it clogs up important space on the condition report.After finishing the condition report it only takes a 10 minutes to complete a separate inventory list of all the items that are not affixed to the property that are staying. List them room by room and don’t forget outside. Its best to type this up and reuse for the next tenancy as well.

Photos and Video

As important as the written report is, the old saying that a picture is worth a thousand words is still true. I used to take nearly 250 pictures for a 3 bedroom house (that is a LOT of words) but lately I have realised that is a little excessive. 10 snaps for each room is probably enough, especially if you follow them up with a short 10 minute video.A video is a great backup for the report and the pictures, but do not fool yourself into thinking it is a substitute. I like to use the video to show the general condition of the house.Be sure that the timestamp is turned on for both the photos and video. It is understandable to feel a little self conscious as you self narrate your walk through video, just remember that no one is going to see it but your tenant and possibly a tribunal member if the very unlikely happens. Your iphone or smartphone is perfect for the job.

Now What?

Once this is all done, I prefer to type up my condition report and inventory (better when it comes to reusing them for your next tenant). Print out a few copies and get your tenants to sign your copy to prove that you have given them your reports including photos and a video.I like to use a cloud storage service like Google Drive or Dropbox. It is very simple to give the tenants access to the file, and when they move out, its easy to go back and check.This all sounds like a lot of work, and frankly, it is. I can do it in an afternoon but I have had years of practice, you may want to budget the better part of a day. However, it is worth the effort. There will be no arguments about the condition of the property it was like at the beginning plus your tenants are much more likely to leave it spotless when they leave because they’ll remember how thorough you were at the beginning of the lease. Don’t underestimate the power of a property condition report.

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